"We had a huge blast at exactly 9:45 pm ... We realised it had come from the bus station," said Musa Babale, a resident of the town of Azare in Bauchi state where the blast occurred.
"The whole place was a mess," he said.
The police and military did not answer calls seeking comment but another resident of the affected area near the Kano road said the security forces had surrounded the site.
Other witnesses also reported seeing casualties but it was not immediately possible to estimate the number and emergency workers were not available to comment.
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While the cause of the blast yesterday remained unclear, Bauchi has been one of the hardest hit areas in Boko Haram's five-year uprising against the Nigerian state.
The insurgents also claimed twin car bombings at a bus station on the outskirts of the capital Abuja earlier this year.
Any indication that the explosion was tied to Boko Haram will further undermine the government's claim to have negotiated a ceasefire with the extremist group.
Violence raged through the weekend in the embattled northeast and the credibility of the so-called Boko Haram negotiator has been widely questioned.
Bauchi borders Nigeria's northeastern region which has been under a state of emergency since May of last year because of the unrest.
Azare is roughly 200 kilometres (125 miles) from the state capital Bauchi city.